What is Form 61A? Why it is needed?

Last Updated at: December 20, 2019
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What is Form 61a_ Why it is needed

The Government has always been keen on keeping an eye on the transactions made by the individuals. Doing so would help them to understand the income patterns and the taxes paid by the taxpayers, along with recognizing the high-value transactions taking place. To find out the income of the individuals, the Income Tax Department introduced the Form 61A under Section 285BA of the Income Tax Act.

Form 61A of Income Tax

It is a form under which all taxpayers submit the SFT (Statement of Financial Transactions) for every financial year. The nature and the value of these Specified Financial Transactions have to be provided along with the Form 61A. This form can be filed electronically and with the use of a Digital Signature Certificate (DSC).

Form 61A Format:

You must fill the following details in the Form 61A are as follows:

  • Name
  • PAN
  • Folio Number
  • Address
  • Number of SFT
  • The SFT and their total value in the financial year
  • The financial year has to be mentioned in which all the transactions are being done.
  • Details regarding the transactions made.

Specified Financial Transactions:

The transactions included under the Specified Financial Transactions are:

  • Transactions made for purchasing, selling, exchange of goods.
  • Contracts for work.
  • Transactions regarding the delivery of various services.
  • Transactions involving the investments and expenditures made.
  • Deposits and loans.

The limit of the transactions so made varies according to its type.

Get free legal advice now

Due Date of Form 61A:

You must mandatorily submit the Form 61A before 31st May of every financial year. Under any circumstances, if the taxpayer is unable to submit this form, a notice period of 30 days is offered for the same.

Transactions made under Form 61A:

Taxpayers submitting Form 61A Limits Transaction Method
Cooperative Banks and Companies Purchase orders and Demand Drafts The maximum limits are INR 10 lakhs.
Cooperative bank and the Banking Companies Cash Payment Used to buy the prepaid RBI offers. These include RBI bonds and others.
Cooperative bank and the Banking Companies Deposits and Withdrawals The minimum amount is INR 50 lakhs and you can increase it further.
Cooperative Banks, Banking Companies, Post Offices Deposits A total amount of 10 lakhs in all the accounts of the Taxpayer
Cooperative Banks, Banking Companies, The Post Master General of the Post Office Cash Payment A total of a minimum of 1 lakh in a year or more. In the case of credit card bills, the minimum amount is ten lakhs and can be extended further.
Company issuing bonds Receipt By getting the bonds, the amount is ten lakhs or more.
Share-issuing companies Receipts To acquire the shares, the receipt must exceed the amount of ten lakhs.
Listed Companies Share buy-back The shares are repurchased in the case when the amount exceeds ten lakhs.
Manager of Mutual Funds Receipts To acquire these shares, the receipts must exceed the amount of ten lakhs.
Foreign Exchange Dealer Receipt A receipt of ten lakhs or more has to be issued by the dealer of foreign sales and currency. This amount is incurred via cards or drafts.
Sub-Registrar/ Inspector General Sale/Purchase The amount of the transaction must be INR 30 lakhs or more.
The people responsible for the audit under Section 44B of ITA (Income Tax Act) Cash receipt For the sales of the goods, the amount must be more than two lakhs

 

These are the various SFT (Specified Financial Transactions) under the Income Tax Rules, 1962.

Check this blog out: Reporting portal

Importance of Form 61A:

This form is the most beneficial for the Income Tax Department, helping them track all high-value transactions that are being made by the individuals, along with understanding how these people try to escape from paying taxes. It helps in developing transparency in the working system. Not just this, it also allows the individuals to keep a record of all the high-value and specified transactions that they have carried out throughout the financial year.

Form 61A of Income Tax can be used in place of a PAN Card, on transactions, clause (a) to (h) Rule 114B.  The transactions are –

  1. Purchasing and selling of immovable property, worth above 5 lakh rupees
  2. Purchasing and selling of vehicles excluding a two-wheeler
  3. Fixed deposits worth above 50 thousand rupees with a bank and a post office
  4. Specified securities, worth above 10 lakh rupees
  5. Bills for hotels and restaurants, above 25 thousand rupees

Penalties for Form 61A:

In case the individual fails to file and submit the form 61A, the authorities will send a warning to them with a tenure of 30 days. Under this period, it is expected of the individual to submit the form. After 30 days, a penalty of 500/day is charged for the same.

Penalties of Submitting the Wrong Information and details:

Knowingly or unknowingly, if the individual submits the wrong information and details, they can change it within ten days without having to pay any penalty.

In case the Income Tax authorities find any discrepancies, then the individual is informed, and a time of 30 days is provided for rectifying the same. If the person fails to do so, they have to pay penalties of up to INR 50,000. The date for rectification of mistake can be extended in case of default information entered.

Conclusion:

The Form 61A of Income Tax is quite essential to deal with all the high-value transactions and finances to maintain transparency.

 

What is Form 61A? Why it is needed?

232

The Government has always been keen on keeping an eye on the transactions made by the individuals. Doing so would help them to understand the income patterns and the taxes paid by the taxpayers, along with recognizing the high-value transactions taking place. To find out the income of the individuals, the Income Tax Department introduced the Form 61A under Section 285BA of the Income Tax Act.

Form 61A of Income Tax

It is a form under which all taxpayers submit the SFT (Statement of Financial Transactions) for every financial year. The nature and the value of these Specified Financial Transactions have to be provided along with the Form 61A. This form can be filed electronically and with the use of a Digital Signature Certificate (DSC).

Form 61A Format:

You must fill the following details in the Form 61A are as follows:

  • Name
  • PAN
  • Folio Number
  • Address
  • Number of SFT
  • The SFT and their total value in the financial year
  • The financial year has to be mentioned in which all the transactions are being done.
  • Details regarding the transactions made.

Specified Financial Transactions:

The transactions included under the Specified Financial Transactions are:

  • Transactions made for purchasing, selling, exchange of goods.
  • Contracts for work.
  • Transactions regarding the delivery of various services.
  • Transactions involving the investments and expenditures made.
  • Deposits and loans.

The limit of the transactions so made varies according to its type.

Get free legal advice now

Due Date of Form 61A:

You must mandatorily submit the Form 61A before 31st May of every financial year. Under any circumstances, if the taxpayer is unable to submit this form, a notice period of 30 days is offered for the same.

Transactions made under Form 61A:

Taxpayers submitting Form 61A Limits Transaction Method
Cooperative Banks and Companies Purchase orders and Demand Drafts The maximum limits are INR 10 lakhs.
Cooperative bank and the Banking Companies Cash Payment Used to buy the prepaid RBI offers. These include RBI bonds and others.
Cooperative bank and the Banking Companies Deposits and Withdrawals The minimum amount is INR 50 lakhs and you can increase it further.
Cooperative Banks, Banking Companies, Post Offices Deposits A total amount of 10 lakhs in all the accounts of the Taxpayer
Cooperative Banks, Banking Companies, The Post Master General of the Post Office Cash Payment A total of a minimum of 1 lakh in a year or more. In the case of credit card bills, the minimum amount is ten lakhs and can be extended further.
Company issuing bonds Receipt By getting the bonds, the amount is ten lakhs or more.
Share-issuing companies Receipts To acquire the shares, the receipt must exceed the amount of ten lakhs.
Listed Companies Share buy-back The shares are repurchased in the case when the amount exceeds ten lakhs.
Manager of Mutual Funds Receipts To acquire these shares, the receipts must exceed the amount of ten lakhs.
Foreign Exchange Dealer Receipt A receipt of ten lakhs or more has to be issued by the dealer of foreign sales and currency. This amount is incurred via cards or drafts.
Sub-Registrar/ Inspector General Sale/Purchase The amount of the transaction must be INR 30 lakhs or more.
The people responsible for the audit under Section 44B of ITA (Income Tax Act) Cash receipt For the sales of the goods, the amount must be more than two lakhs

 

These are the various SFT (Specified Financial Transactions) under the Income Tax Rules, 1962.

Check this blog out: Reporting portal

Importance of Form 61A:

This form is the most beneficial for the Income Tax Department, helping them track all high-value transactions that are being made by the individuals, along with understanding how these people try to escape from paying taxes. It helps in developing transparency in the working system. Not just this, it also allows the individuals to keep a record of all the high-value and specified transactions that they have carried out throughout the financial year.

Form 61A of Income Tax can be used in place of a PAN Card, on transactions, clause (a) to (h) Rule 114B.  The transactions are –

  1. Purchasing and selling of immovable property, worth above 5 lakh rupees
  2. Purchasing and selling of vehicles excluding a two-wheeler
  3. Fixed deposits worth above 50 thousand rupees with a bank and a post office
  4. Specified securities, worth above 10 lakh rupees
  5. Bills for hotels and restaurants, above 25 thousand rupees

Penalties for Form 61A:

In case the individual fails to file and submit the form 61A, the authorities will send a warning to them with a tenure of 30 days. Under this period, it is expected of the individual to submit the form. After 30 days, a penalty of 500/day is charged for the same.

Penalties of Submitting the Wrong Information and details:

Knowingly or unknowingly, if the individual submits the wrong information and details, they can change it within ten days without having to pay any penalty.

In case the Income Tax authorities find any discrepancies, then the individual is informed, and a time of 30 days is provided for rectifying the same. If the person fails to do so, they have to pay penalties of up to INR 50,000. The date for rectification of mistake can be extended in case of default information entered.

Conclusion:

The Form 61A of Income Tax is quite essential to deal with all the high-value transactions and finances to maintain transparency.

 

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